Chapter - 2

Principles of Management

 

Principles of management are broad and general guidelines for managerial decision-making and behavior. They form the foundation upon which management practices are built.

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1. Nature of Principles of Management:

   • Universal Applicability: These principles can be applied to all types of organizations, regardless of their nature and size.

   • General Guidelines: They provide broad guidelines to managers but do not dictate exact actions.

   • Formed by Practice and Experimentation: These principles are developed through continuous observation and practice.

   • Flexible: They are not rigid and can be modified according to the situation.

   • Aimed at Influencing Human Behavior: They aim to direct the behavior of employees towards achieving organizational goals.

   • Cause and Effect Relationships: They help managers understand the likely outcomes of their actions.

 

Significance of Principles of Management

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1. Providing Managers with Useful Insights: They help managers understand complex situations and develop solutions.

2. Optimum Utilization of Resources: Principles guide managers in the efficient use of resources to achieve maximum productivity.

3. Scientific Decisions: They ensure that managerial decisions are based on systematic analysis rather than intuition.

4. Meeting Changing Environment Requirements: Principles are adaptable and can help managers cope with changes in the business environment.

5. Fulfilling Social Responsibility: They ensure that the organization operates in a socially responsible manner, balancing various stakeholder interests.

6. Management Training, Education, and Research: Principles form the basis for training programs, educational courses, and further research in management.

 

Fayol’s Principles of Management

Henri Fayol, a pioneer in the field of management theory, outlined 14 principles of management which are widely accepted and practiced:

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1. Division of Work: Specialization increases productivity by focusing on specific tasks.

2. Authority and Responsibility: Managers must have the authority to give orders and the responsibility to ensure that tasks are completed.

3. Discipline: Employees must obey and respect organizational rules and standards.

4. Unity of Command: An employee should receive orders from only one superior.

5. Unity of Direction: All activities with the same objective should be directed by one manager using one plan.

6. Subordination of Individual Interest to General Interest: Organizational interests should take precedence over individual interests.

7. Remuneration: Compensation should be fair to both employees and employers.

8. Centralization and Decentralization: The degree of centralization or decentralization depends on the specific circumstances of the organization.

9. Scalar Chain: A clear line of authority from top management to the lowest ranks represents the scalar chain.

10. Order: People and materials should be in the right place at the right time.

11. Equity: Managers should be kind and fair to employees.

12. Stability of Tenure of Personnel: Long-term employment is important for the development of skills and loyalty.

13. Initiative: Employees should be encouraged to take initiative within their scope of work.

14. Esprit de Corps: Promoting team spirit will build harmony and unity within the organization.

 

Conclusion

 

This chapter emphasizes that the principles of management are essential for guiding managerial actions and achieving organizational goals effectively and efficiently. These principles provide a strong foundation for understanding the complexities of management and enhancing managerial practices.

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